We don't have to assume that the aliens know Latin! The supposition is that the future humans call their home planet Terra instead of Earth and call themselves Terrans, and the aliens follow suit. The idea is that, in a science-fictional future where space travel is commonplace, the Earth, instead of being the World, is a *place*; and, like any other place, it should have a proper name, instead of a common noun meaning "dirt". (I've been told that, if you know Latin, then "Terra" is no better than "Earth", and "Tellus" would be a better choice. In fact, in some science fiction stories the Earth is called Tellus and its people are Tellurians.)

According to the [Science Fiction Citations](http://www.jessesword.com/sf/) site, the earliest known use of ["Terran" as a noun](http://www.jessesword.com/sf/view/127) meaning "an inhabitant of the planet Earth" (aka [Earthian](http://www.jessesword.com/sf/view/1604), [Earthie](http://www.jessesword.com/sf/view/1876), [Earthling](http://www.jessesword.com/sf/view/2080), [Earthman](http://www.jessesword.com/sf/view/46), [Tellurian](http://www.jessesword.com/sf/view/120), [Terrestrial](http://www.jessesword.com/sf/view/1195), [Terrestrian](http://www.jessesword.com/sf/view/1703), etc.) was in [*Astounding Science-Fiction*, May **1946**](http://www.isfdb.org/cgi-bin/pl.cgi?57593+c), in part 3 of the serialization of [George O. Smith](https://en.wikipedia.org/wiki/George_O._Smith)'s novel [*Pattern for Conquest*](http://www.isfdb.org/cgi-bin/title.cgi?21772):

> *The mission, not entirely understood by the **Terrans**, consists of destroying a machine sent forth by the Loard-vogh, a race that is conquering the Galaxy on a twenty-thousand-year program. This machine restricts mental activity through a vast area, thus permitting the Loard-vogh to advance without difficulty. Communication between the Little People of Tlembo and **Terrans** is also restricted by the machine, and so the true nature of the mission is not really known.*

The earliest citation for ["Terran" as an adjective](http://www.jessesword.com/sf/view/126) is from the same **1946** George O. Smith story:

> "Seventeen million of the Loard-vogh died in the Battle of Sol, and more than half of them perished because **Terran** spores crept into chinks in their space armor. Chinks so small that they do not permit loss of air in space.

However, the form "Terrane" was seen earlier, in the **1881** novel [*Three Hundred Years Hence*](http://www.isfdb.org/cgi-bin/title.cgi?1010493) by [William Delisle Hay](http://www.isfdb.org/cgi-bin/ea.cgi?124608):

> I am speaking of the **Terrane** Exodus and the Cities of the Sea.

The earliest citation for "Terra" as a name for the planet Earth is from an **1871** lecture "Science & Revelation" by [Robert Payne Smith](https://en.wikipedia.org/wiki/Robert_Payne_Smith):

> Now, let us suppose ourselves philosophers come, we will say, from the planet Jupiter, on a mission intrusted to us by the Jovians, to examine and report upon the nature of the creatures which people the four inferior planets, **Terra**, Venus, Mercury, and Mars.

[Jeff Prucher](http://sf-encyclopedia.com/entry/prucher_jeff), an associate of the Science Fiction Citations site, wrote the following essay on "Earthlings" in his [Hugo-winning](http://www.thehugoawards.org/2008/08/2008-hugo-award-results-announced/) book [*Brave New Words: The Oxford Dictionary of Science Fiction*](https://global.oup.com/academic/product/brave-new-words-9780195387063?cc=us&lang=en&):

> In science fiction, when beings from different worlds encounter each other, they are generally named by their planet or star of origin; thus [Martians](http://www.jessesword.com/sf/view/240) are from Mars, and Sirians are from some hypothetical planet orbiting the star Sirius. While there are generally few terms in use for beings from any given planet or solar system, there is much greater variety in the terms for people who are from Earth. Many of these terms have been in use for centuries in other senses. Some, such as [**Earthling**](http://www.jessesword.com/sf/view/2080) and [**Terrestrial**](http://www.jessesword.com/sf/view/1195), originally designated earthly (as opposed to heavenly or spiritual) beings. [**Terrestrian**](http://www.jessesword.com/sf/view/1703) was once an adjective used to describe animals that lived on land rather than in water. [**Earth-man**](http://www.jessesword.com/sf/view/46) and [**-woman**](http://www.jessesword.com/sf/view/1103) once referred only to beings that were associated with soil or the ground in some way; once SF writers got hold of them, they added [**Earth-folk**](http://www.jessesword.com/sf/view/1975), [**Earth-girl**](http://www.jessesword.com/sf/view/1875), and [**Earth-person**](http://www.jessesword.com/sf/view/1729) as variations. SF writers also coined the fairly common terms [**Terran**](http://www.jessesword.com/sf/view/127), [**Tellurian**](http://www.jessesword.com/sf/view/120) (after [*Tellus*](https://en.wikipedia.org/wiki/Terra_(mythology)), the Roman goddess of the earth), [**Earther**](http://www.jessesword.com/sf/view/1243), [**Earthian**](http://www.jessesword.com/sf/view/1604), and [**Earthie**](http://www.jessesword.com/sf/view/1876), in addition to many more that never quite caught on, including **Earthan**, **Terrene**, and [**Terrestial**](http://www.jessesword.com/sf/view/1830). However, when faced with creatures from another star system entirely, beings from the Moon or Jupiter may seem slightly less alien, and so the word [**Solarian**](http://www.jessesword.com/sf/view/1965) was coined to refer to any inhabitant of Earth's solar system, human or otherwise—[**Earthling**](http://www.jessesword.com/sf/view/2080), [**Martian**](http://www.jessesword.com/sf/view/240), and [**Plutonian**](http://www.jessesword.com/sf/view/1460) alike.